A real estate salesperson receives a $25,000 deposit from a client who pays with three separate cash payments of $8,000, $9,000, and $8,000 over two days. What FINTRAC reporting obligation applies?

Q: What is the correct answer to: A real estate salesperson receives a $25,000 deposit from a client who pays with three separate cash payments of $8,000, $9,000, and $8,000 over two days. What FINTRAC reporting obligation applies?

The correct answer is File a Large Cash Transaction Report as payments appear related. Option C is correct because FINTRAC regulations require a Large Cash Transaction Report when multiple cash payments totaling $10,000 or more appear to be related, regardless of individual payment amounts. The three payments ($8,000 + $9,000 + $8,000 = $25,000) from the same client over two days for the same deposit clearly constitute related transactions. The timing and apparent structuring trigger the LCTR requirement under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

Q: What background knowledge is needed for this Regulatory Compliance question?

FINTRAC (Financial Transactions and Reports Analysis Centre of Canada) requires real estate professionals to report Large Cash Transaction Reports (LCTRs) for cash transactions of $10,000 or more. Crucially, this includes multiple transactions that appear to be related, even if individual amounts are below $10,000. Related transactions are those conducted by or on behalf of the same person/entity within a reasonable timeframe for what appears to be the same purpose. This prevents 'structuring' or 'smurfing' - deliberately breaking large transactions into smaller amounts to avoid reporting. Real estate professionals are reporting entities under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

Q: What is a good way to remember the answer to this Regulatory Compliance question?

Remember RELATE: Related transactions Equal Large Amount Totaling Everything. When multiple cash payments from the same client appear related (same purpose, reasonable timeframe), add them all up. If the total hits $10,000+, it's LCTR time, regardless of individual payment sizes. When you see multiple cash payments in an exam question, immediately ask: Are these RELATED? Same client? Same purpose? Same timeframe? If yes, add them up and check if total exceeds $10,000 for LCTR requirements.

Q: What exam tip applies to this Regulatory Compliance question?

Look for multiple cash payments from the same client within a short timeframe. Add up all related payments - if total exceeds $10,000, it's an LCTR regardless of individual amounts. Don't get distracted by individual payment thresholds.

Q: How does this Regulatory Compliance concept apply in real world practice?

A buyer wants to purchase a $500,000 condo and provides the $50,000 deposit through five separate $9,500 cash payments over one week, claiming they're from different family members. Despite each payment being under $10,000, the salesperson must file an LCTR because these appear to be related transactions totaling $47,500. The pattern suggests potential structuring to avoid reporting thresholds, making this a clear FINTRAC compliance issue requiring immediate reporting.

Question

Regulatory ComplianceFintracMEDIUM

A real estate salesperson receives a $25,000 deposit from a client who pays with three separate cash payments of $8,000, $9,000, and $8,000 over two days. What FINTRAC reporting obligation applies?

Answer Options

A

No reporting required as individual payments are under $10,000

B

Report only the $9,000 payment as it's closest to the threshold

C

File a Large Cash Transaction Report as payments appear related

D

File a Suspicious Transaction Report only